If Service Release 3 is not installed - and it is NOT during the original download, by the way - you have the solution there. And the "only one person at a time issue" sounds very much like the 'Another Station is accessing the database in a way...' error addressed in KB 13624 . If Windows User Account Control is set to the default on a machine, it will force the Installation Folder to go to a UNC naming, and cause the issue you describe.
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